Litigation specialist firm Stewarts today posted financial results that saw revenue fall by 25% to £85.1m. Net profit and PEP both fell by 56%, with profit down to £25.6m and PEP down to £1.2m, its lowest figure since 2019.
The firm also reported its equity spread, which shows that its highest earner took home £1.7m, while payouts at the bottom of the ladder were just over £592,000. This is down from £3.4m at the top end and £1.2m at the bottom last year. The number of equity partners was steady at 21.
While the declines are significant, the firm stressed in its statement that they are in line with what it has for several years referred to as a ‘non-linear’ growth pattern – a result of contingent fee arrangements (CFAs). ‘I am pleased to announce a solid set of financial results’, said managing partner Stuart Dench (pictured). ‘As a disputes-only law firm, our revenue is non-linear, and this represents a good core income performance and is our second-highest revenue year.’
In 2022, what Dench called an ‘extraordinary’ year, the firm saw turnover jump 43%, while profit and PEP soared by 93% and 86%, respectively.
The fall in turnover this year was the largest the firm has reported since at least 2004, and dwarfs the 20% drop reported in 2018, when PEP fell by 28%.
However, as Dench noted, this year’s turnover remains the second highest ever recorded at Stewarts. The firm’s five-year revenue growth rate now stands at a little over 36%, down ten percentage points from its 2017-22 rate of 46%.
Dench highlighted continued investments in both CFAs and damage-based agreements (DBAs), as well as in ESG, which saw the firm receive Planet Mark Business Certification. ‘This is one aspect of our firmwide strategy to prioritise responsible business practices’, said Dench.
Chief strategy office Leena Nangia expanded further: ‘We’re committed to intensifying our approach to sustainability and ensuring we have the right plans in place to reduce our impact on the environment.’